MEET THE NEXT CEO OF MICROSOFT: Steven Sinofsky Is The Heir Apparent

Microsoft had just shipped the final code for Windows 7 to PC manufacturers, who had begun burning it onto the tens of millions of new computers that would ship that Christmas.

It should have been a triumphant moment for Steven Sinofsky.

In just over three years of running Windows, Sinofsky and his team had managed to clean up the worst messes in Windows Vista, add some new features and a fresh coat of paint, and — most importantly — get it out the door on time, before the holiday season.

The branding was refreshingly simple, a throwback to the early days of Microsoft: Windows 7. The early reviews were glowing. PC-makers were cautiously optimistic about a good holiday season after the disaster of 2008. Big business customers, who had mostly skipped Vista and stayed on XP, were starting to talk about upgrading.

Best of all, Steve Ballmer had just promoted Sinofsky to President — a title that Ballmer himself held for three years before becoming CEO.

But he was already planning Microsoft's next moves.

A few months later*, a former Microsoft exec tells us, Sinofsky was standing in front of the Windows team at the Seattle Convention Center, reading a press release from the future.

He knew that Windows was in serious danger. The iPhone had kicked off a smartphone revolution that was making the PC less relevant, and Apple had announced a new tablet computer called the iPad — an idea that Microsoft had been kicking around for almost a decade.

Only this Apple tablet would not be like a Mac. It would be like an iPhone — long battery life, big touch screen, and tens of thousands of apps that were so easy to install a five-year-old child could do it.

Sinofsky's press release described a completely reimagined version of Windows that would make the PC more approachable, easier to use, and more fun. “Radically human,” he called it.

Tomorrow, Microsoft will deliver the first consumer preview of Windows 8, giving everybody a chance to see how it looks and works. Based on early demonstrations so far, it will be exactly what was promised — a completely different and much more approachable version of Windows. And it will come out exactly on time, later this year.

But that’s no surprise — Steven Sinofsky is known for delivering exactly what he promises, and always on time.

Several people we spoke with for this article claim Sinofsky’s influence and personality drove them out of the company. Another former employee called him a “cancer.” Others used much ruder words than that.

But even his biggest detractors admit he’s brilliant when it comes to shipping complicated, high-quality software on a regular, predictable schedule. This has earned him the trust and respect of both Bill Gates and Steve Ballmer.

So love him or hate him, most people who know Microsoft agree.

Unless Windows 8 is a failure, Steven Sinofsky will be the next CEO of the company.

Next page: The Sinofsky Takeover →

*Update: Microsoft says that there was no large meeting to discuss the future of Windows in summer 2009, as our sources said. However, Microsoft acknowledges such a meeting happened in spring 2010. The story has been updated.

THE SINOFSKY TAKEOVERMicrosoft

The takeover has already begun.

Some trace it back to a 2009 retreat for Microsoft executives, where Steven Sinofsky gave a presentation on how he runs the Windows group.

Steve Ballmer had often told other leaders they needed to “align” with the Windows team, since Windows is still the product that drives most of Microsoft’s business. A lot of them were confused about what this meant, especially since Sinofsky had taken over Windows development in 2006.

So Sinofsky told them how he does things.

Plan first, then build. Eliminate most middle management. Deliver exactly what you promise, exactly on time.

“I know that it was not well received by many,” one former Microsoft exec tells us, “because people were much more accustomed to the less structured approach that … other key Windows leaders had enabled for the prior two decades.”

Sinofsky's methods have since become standard throughout the company. That’s true even for products that he has never run, like Bing search and database software.

It’s not clear whether these methods were imposed from the top or adopted willingly. But several people told us that Sinofsky is close to Bill Gates and Steve Ballmer, and his methods have been proven to work for Windows and Office, Microsoft’s two biggest products.

So it’s easy to see how other execs might feel compelled to follow the Sinofsky way, even without a direct order from on high.

Eventually, the word trickled down: One former manager in the online group told us that he was required to read and understand Sinofsky's internal blog posts, and his team was expected to do things Sinofsky's way.

Several former Microsoft people claim that Sinofsky’s growing influence is a big reason many senior execs and engineers have left in the last three years — not because Steve Ballmer fired them for poor performance, and not because they disagreed over fine points of strategy.

One said that computer engineers view coding as both an art and a science. A lot of them were pissed off at having somebody else dictate their art to them.

WINDOWS PHONE IS NEXT

Most recently, Sinofsky’s influence has been extended to Microsoft’s mobile platform: Windows Phone.

Until 2010, Microsoft's mobile phone software was part of the Entertainment & Devices group, like the Xbox and Zune. It was considered a consumer product, and ran on different underlying technology than Windows.

About a year ago, Microsoft decided to align the two groups more closely.

One former exec tells us that the decision was shared with mobile leader Andy Lees, who made his disagreement known. Microsoft decided to keep Lees in charge to complete a critical software update ("Mango") and seal the Nokia partnership, then replace him with Terry Myerson, who is a Sinofsky protégé and has been leading development for Windows phone since 2009. That change happened in December.

This story has been disputed. Two people who left the Windows Phone team since then say they saw no signs that Sinofsky is in charge. Officially, Myerson reports to Ballmer, not Sinofsky. (Microsoft had no comment.)

But another person who left Microsoft last year told us that he had heard back in 2010 that Sinofsky would eventually take charge of Windows Phone. This person speculates that Microsoft will wait to make the move until after Windows 8 to avoid distracting the Windows team — and because a lot of engineers on the Windows Phone team had moved from Windows a few years ago in large part to escape Sinofsky.

Sure enough, after we spoke to these sources, news leaked that the next version of Windows Phone would be based on the same kernel and core technology as Windows 8, and would come out around the same time.

Sinofsky may not end up formally in charge of Windows Phone, meaning he won't control its personnel or budget. But Windows Phone is already using his development methods, and will soon be using the core technology that he controls.

One former Windows Phone employee told us, “As Ballmer likes to say, ‘Windows is the air we breathe.’ It’s hard to avoid connecting with the Windows team … That’s been the case since Sinofsky became president.”

Next page: How Did He End Up In The Driver's Seat? →

HOW DID HE END UP IN THE DRIVER'S SEAT?

Sinofsky's rise to power started with earning the trust of Bill Gates.

Sinofsky was born in New York and spent most of his childhood in Orlando, Florida. He graduated from Cornell University with honors, then got his master’s in computer science from the University of Massachusetts, Amherst in 1989.

Then he went straight to work at Microsoft.

When he arrived, it immediately felt like home. He writes in a blog post from 2005:

“It was incredibly cool when I showed up at Microsoft—I was 23 years old and ready to go to work. I had no friends in Seattle. My family was 3000 miles away. I lived in an apartment within walking distance from Microsoft that had a pool where beautiful people hung out. I had disposable income for the first time in my life. I was ready to be one of those cool people on Melrose Place, except I quickly found out that the work at Microsoft was way cooler than sitting by the pool … It was our own Melrose Place, but with C++ code instead of an advertising agency. It had COMDEX instead of Venice Beach.”

APBill Gates, around the time Sinofsky was working for him.

A few years after he started, Sinofsky got a big break when Bill Gates chose him to be one of his technical assistants. There, the two formed a bond of trust that persists to this day.

In 1994, on a visit back to his alma mater, Sinofsky was stuck at Cornell during a snowstorm. While he was there, he saw how Cornell was taking advantage of the Internet with email for undergraduates and online course listings.

He dashed off an email to Gates with the subject line “Cornell is WIRED!” emphasizing how important the Internet was becoming.

Sinofsky’s email kicked off a chain of events that eventually led Bill Gates to write his famous “Internet Tidal Wave” memo in 1995. That memo caused every Microsoft product group to start building Internet connections into their products and paved the way for Internet Explorer to be bundled into Windows, kicking off the consumer Internet revolution. (It also kicked off the antitrust lawsuit that would mire Microsoft for almost 10 years in the late 1990s).

Later, when Sinofsky took over the Office group, his ability to get product releases out on time made him indispensable.

One former Microsoft employee recalls a time when Sinofsky was being particularly stubborn about doing what Gates wanted the Office group to do. Gates brought up the possibility of replacing him.

This former employee, who heard the conversation, says, “The pushback was that Office was so important from a revenue standpoint, and Steven was so important to Office delivering that revenue, that they couldn’t fire him.”

Eventually, Gates came around to that point of view. Sinofsky is now almost untouchable, and has occasionally used that status to get his way.

A different former employee tells us that Sinofsky once threatened to quit when he wasn’t given a desired assignment. Gates said that he couldn’t imagine Microsoft without Steven. As consolation, Microsoft's leadership at the time put some other products under Sinofsky’s control.

Steve Ballmer also trusts Sinofsky because he’s demonstrated an ability to deliver updates to his products on a very tight three year schedule.

Here’s why that matters so much.

Microsoft’s business depends on big companies buying long-term license agreements — at least $20 billion of Microsoft’s more than $70 billion a year comes from these agreements. These deals tend to run on a three year cycle, and include the right to upgrade to new product versions that come out during that term.

If Microsoft fails to deliver a new version of the product within three years — as happened with Windows Vista and has happened with other products, like SQL Server — customers wonder “why did we buy a license agreement?” That makes selling renewals and upgrades a lot harder the next time around.

This is Ballmer’s bread and butter. He is said to know and understand almost every aspect of Microsoft’s licensing rules, and exactly how changes are going to affect revenues in any given product group.

Most executives at Microsoft are “Bill people” or “Steve people.” Sinofsky is both.

Next page: What Would Sinofsky Be Like As CEO? →

WHAT WOULD MICROSOFT LOOK LIKE UNDER SINOFSKY?

Even his biggest detractors admit that Sinofsky has world-class skills when it comes to delivering high quality, massive scale software projects on time. One critic called him a “genius.” Another admitted he was “brilliant.”

“He’s a brilliant guy when it comes to leading a process and shipping on a regular schedule. He did a great job coming over to Windows, cleaning up the mess that was Vista, and turning that into Windows 7, which has been a huge success.”

Another former executive says that Sinofsky is exactly what Microsoft needs.

“Steven devised a strategy to return to excellence. Period. It makes people uncomfortable, but I think the results speak for themselves. Most people cannot imagine the scale and complexity of that project [Windows]. It is building the fucking pyramids. It is the digital equivalent of one of the world's wonders.”

So what is the Sinofsky way, exactly? Here are some hallmarks:

Quality and predictability over features. Sinofsky values quality releases and timing over adding features. If a feature is taking too long to get right, Sinofsky will cut it — even if it’s a feature that customers have demanded or that competitors already have.

Because timing is so important, Sinofsky has no tolerance for underlings who overpromise and underdeliver. Or, for that matter, the opposite — if you deliver more than you said you would, he’ll assume you were softpadding your expectations to look better, and ask you to be more accurate next time.

Predictability is king.

Data driven. One person who used to be part of Microsoft Research told us that Sinofsky hates the small focus groups that a lot of other Microsoft product leaders use to design products.

“He’s a champion of large-scale data projects,” this person says. “This is commonplace on the Web, where everything’s on the server side and you can track everything on the Web, but in packaged software it’s actually quite unorthodox.“

This is seen in Sinofsky’s love of Watson, a Microsoft technology that tracks the errors users are seeing, then lets users report those errors back to Microsoft.

In his book “One Strategy,” Sinofsky calls Watson “simply the biggest innovation in computer science in the last 10 years. I don’t say that lightly and I mean computer science.”

The “triad.” This is probably the biggest change, and the one that has caused the most conflict.

At Microsoft, software development is organized into three functions: developers who write code, testers who test it, and program managers who determine specs.

Previously, employees in these three functions all reported to “feature leaders.” These feature leaders coordinated all the features so they were finished at the same time and worked properly together. They reported to a product leader, who in turn would report to a product group leader, and so on up the chain.

Microsoft

Under Sinofsky, most of these mid-level managers are gone. Basically, dev, test, and program management all report up to the senior leader of the product, or in some cases the senior leader of the entire product group — like Sinofsky.

Sinofsky has been clear about his distaste for too much middle management. As he put it in a 2005 blog post: “We’ve built SharePoint from the ground up within our team, and done so without any middle managers coming in and trying to gum things up. “

This may sound great from the outside — Microsoft’s bloated bureaucracy was one reason why the company got so slow.

But it eliminated opportunities for career advancement and gave more power to the executives who were already in the most senior positions. That has driven a lot of experienced people out of the company.

As one former engineer explains, there’s no role in a Sinofsky organization for architects who think about strategy — if you don’t want to manage people, you have to write code, test products, or come up with specs. “So at the upper tier, people are under severe pressure to find roles they consider appropriate. That’s what’s driving a lot of senior guys away.”

Another former Microsoftie told us that Amazon, in particular, is benefiting from this migration.

Agile but not “agile.” In a lot of ways, the Sinofsky method is the polar opposite of the “agile” software development method used by Facebook, Amazon, and many tech companies viewed as innovative.

Agile development organizes groups into small teams — as small as two people — each of which works on a specific backlog associated with the product. As those backlogs are eliminated, the product slowly comes together. Teams move quickly from task to task, taking no longer than a few weeks and sometimes shifting in mid-stream, and can be broken down and recompiled with different members.

The Sinofsky method is quite different: A product leader sets the product vision early on, then large teams set off on a well-defined course to reach that vision. It's more "measure twice, cut once" with "very discrete stages," says a former exec who approves of his methods.

Sinofsky doesn’t have much patience for people who complain his methods aren't “agile” enough.

In one blog post, he explains how the Office team decided to build a note-taking application, OneNote, without seeking meetings or approval from any outsiders.

“If you have an organization that can develop a brand new product and bring it to market in 2 years without any ‘approval’ then I would say this is an agile organization. On the other hand, if you proposed something that didn’t get built by the organization then I can assure you that you will quickly become a spokesperson for why the organization lacks agility. “

No silly time-wasters. Microsoft employees who hate this process can at least take solace that Sinofsky has little patience for the kind of scripted events that make “The Office” so uncomfortable to watch.

“We got all sorts of weird instructions like no mobile phones or food, some folks had to arrive (at a small campground-like environment on Cape Cod) a day early. It was all spooky and I was super uncomfortable. Using analogies of today, it was like The Apprentice meets Survivor or something, except there were no lucrative endorsements waiting for us after we finished …. Without going into too many details, suffice it to say that a group of Microsoft people managed to ‘break’ the simulation. We had the ‘facilitators’ in tears and ended the game two days early. It was torture. I swore off all HR-related activities for about 5 years after that.”

Not 24/7. Sinofsky also believes in work-life balance, and thinks the 24/7 life of startups and some competitors (Amazon is often named) is a huge mistake.

“Anyone who tells you how cool it is to pull all-nighters on commercial software or anyone who says ‘I live at the office’ and means it, is really someone I would not want checking code into my project. To be blunt, there is no way you can do quality work if you do not give your brain a break … If a company is driving you to work crazy hours like this, either because you want to or they want you to, it is just uncool.”

Next page: Nobody Talks, Nobody Disagrees →

ABSOLUTE SECRECY

Expect a Sinofsky-led Microsoft to be totally locked down. One of the most common comments about Sinofsky is that he will not share information — even with other Microsoft product groups — until he’s ready to do so.

One former veteran said, “It feels pretty weird when a super senior person inside the company whose job description is to know what’s going on can’t even find out what another team's doing.”

This level of secrecy is standard at a lot of consumer-oriented companies like Apple and Amazon.

ScreenshotWho said that?

But it can pose a problem for the big companies who are Microsoft’s most important customers, as well as the PC makers who need to plan for the next release of Windows.

“Enterprises don’t buy the current product nearly as much as the vision …They get really frustrated with not having information earlier. Same with OEMs [PC manufacturers], they are not getting information soon enough to know where Microsoft is going and how to react,” says one former employee.

Sinofsky wrote a blog post entitled “Transparency and Translucency” where he explained his reasoning: If product plans leak early, customers and partners make plans based on information that may later change. That costs real money.

And forget about timing information releases around the news cycle.

Sinofsky wrote, “Notice that these audiences are our customers and partners and that a non-goal is allowing the news cycle or needs of the press to drive disclosure timing and contents.”

In fact, one person told us that Sinofsky has been pushing Microsoft’s public relations group to speak less to the press, and to reconsider showing at big public events like the Consumer Electronics Show (which Microsoft will skip next year for the first time in its history).

As far as leaks go, Sinofsky has zero tolerance. One former Windows group employee said that several people were fired on the spot when leaks about Windows 7 were traced back to them. Another former Microsoft employee said that the company has a forensics team that it uses to track leaks, particularly from people in outward facing roles (customer relations, public relations, and so on).

The message has been passed along.

Current Microsoft employees are extremely reluctant to discuss Sinofsky or Windows even on deep background — not only with reporters, but with anybody. One former member of the Windows group told us that when he brings Sinofsky up in conversation to old friends still at the company, their eyes glaze over and they change the subject.

As for Sinofsky himself, he declined all comment on this story, and has never cooperated on a profile. A representative explained, “he doesn’t like profiles.”

Sinofsky would also be an absolute leader. Several people told us he demands 100 percent loyalty to his methods — and he can be ruthless and backhanded in undermining people who disagree with him.

One person who worked with him says, “He’s obviously incredibly hard-headed. In any argument, he really sticks to his guns. In any conversation, any attempt to change his position is not successful.”

A former exec says Sinofsky has to be a dictator because the old way was not working, as the problems with Windows Vista showed. “Because of the scale, he needed to be more military-style and more top down. Needed. Others can and did try other approaches, but it just doesn't work.”

Sinofsky welcomes debate and feedback to a point. A person who worked at Microsoft Research back in the early 2000s says that Sinofsky was “pretty legendary for being someone who's up on email all the time, for always answering his own email. He’ll take feedback and have discussions with some intern who just started.”

But his tendency to be on email all the time can have a dark side as well.

“If you ever get in an email war with the guy you’re dead,” one former exec told us, “because he can write tomes, and apparently at any hour of the day.”

This person and several others also said that Sinofsky would go to great lengths to undermine people who don’t agree with him.

For instance, this person told us, Sinofsky sometimes “could find only one or two people who’d agree with him, so he’d just sit there and chisel. For most executives who are inspired and trying to build businesses and grow a vision, life's too short for that kind of thing.“

It’s telling that “One Strategy,” the book Sinofsky wrote on corporate strategy with Harvard Business School professor Marco Iansiti, starts with the following sentence: “One Strategy describes a general approach for organizations to achieve a single, shared strategic perspective and translate that perspective into action.” (Emphasis ours.)

In an organization with a single shared perspective, there’s not much room for dissent.

Next page: But What About The Vision Thing? →

HE'S GOT THE CHOPS, BUT DOES HE HAVE THE VISION?

There’s another famous executive who saved a struggling business, got a reputation for delivering quality products on time, demanded absolute secrecy and loyalty, and was famously hard to get along with.

Indeed, one person who knows Sinofsky says that he looks up to Jobs and emulates him in some ways — he prefers a Japanese-style simplicity and lack of clutter, and takes careful control of his public appearance with a consistent uniform of a v-neck sweater and solid colored undershirt.

The only trouble with this comparison, according to detractors, is that Sinofsky lacks the vision of Steve Jobs. His products keep the business going, but they don’t inspire.

One person who left recently puts it like this: “His delivery track record is exceptional. But the excitement level is not. There hasn’t been a lot of excitement around his products.”

A former exec explains, “He's not a creative guy, he's not going to inspire creativity in others.”

A different former exec says Sinofsky's strengths are elsewhere. “Steven is much, much stronger at fixing and refining and tuning and improving.”

Ellis Hamburger, Business InsiderWindows 8 running on a tablet PC.

Windows 8 is Sinofsky’s chance to change that perception. It has a fresh design for touch screens that was borrowed from Windows Phone — it’s called Metro, and it looks nothing like the Windows you’re used to seeing.

Windows 8 also runs on the super-efficient ARM processors that power most tablets like the iPad — a huge shift for a product that was once so wedded to Intel’s microprocessor architecture that outsiders coined “Wintel” to describe the two.

Credit Sinofsky for being willing to take these risks.

Former Windows leader Brad Silverberg thinks that Windows 8 is Sinofsky’s chance to prove he has vision.

“Steven has done a great job coming over to the Windows Group, expanding the role of Windows to tablets and taking the Metro UI [user interface] from Xbox and Windows Phone and bringing it into Windows. Those are huge steps forward to the company and Windows, and I attribute them to Steven's ability to look ahead.”

Not that it’s going to be easy. One former exec says that revitalizing Windows is “the biggest challenge and broadest scale in the history of modern business.”

IF NOT SINOFSKY, WHO?

Nobody wants to be dubbed the future king while the current king is still on the throne. It’s the quickest way to the dungeon.

Steve Ballmer has told Microsoft executives and said in public that he has no plans to retire until his youngest kid enters college, which means 2017 or so.

But succession planning has almost certainly begun. And if Bill Gates is any guide, Microsoft will telegraph its intentions early.

Gates handed the CEO reins to Ballmer in 2000. In 2006, he announced his plans to retire from full-time duties and named Ray Ozzie as his successor in the Chief Software Architect role. But he didn’t actually step away from day-to-day duties at Microsoft until 2008.

If Ballmer is going to follow the same slow transition plan, he’d start talking about succession in 2015 — ample time to see if Windows 8 is a hit, a flop, or somewhere in between.

Unless Windows 8 is a disaster, Sinofsky is probably next in line.

“He’s absolutely the next CEO,” says one former exec.

“He’s definitely the heir-apparent,” says another person who came into Microsoft through an acquisition and worked there for several years.

A different former exec agreed, but said Sinofsky could use a peer to help him out.

“The company was at its best with Bill [Gates] and Steve [Ballmer] together. I'd love to see that kind of symbiotic leadership happen there again, it's been lacking for too long. Not only is Windows bigger than one person, Microsoft has been bigger than one person for a long time — and arguably always was.“

Maritz was one of Microsoft’s top leaders when he stepped down in 1999. He went on to become the CEO of VMWare, which competes with Microsoft in the infrastructure software business.

He is widely respected among Microsoft employees who were there during his reign, and a lot of people think he has the vision to do innovative things.

As one person put it, “If you could lure Paul Maritz away from VMWare to come back to Microsoft, that would … receive widespread and external support. I don’t know if it’s feasible, as Bill’s relationship with Maritz deteriorated as Paul became a competitor.”

Another agrees: “If Steven became CEO it'd be a signal to the company and the people in the company, we're just going to be machinery, shipping stuff that we've been shipping. If you got Maritz in there, you'd end up with a very different company.”

The question is — do Bill Gates, Steve Ballmer, the board of directors, and shareholders want Microsoft to be a very different company?